Asked by
Heather MacDonald
on Nov 25, 2024Verified
Other things equal, if the prices of a firm's variable inputs were to fall,
A) one could not predict how unit costs of production would be affected.
B) marginal cost, average variable cost, and average fixed cost would all fall.
C) marginal cost, average variable cost, and average total cost would all fall.
D) average variable cost would fall, but marginal cost would be unchanged.
Variable Inputs
Inputs or resources whose usage changes according to the level of production.
Unit Costs
The cost incurred by a company to produce, store, and sell one unit of a particular product or service.
Production
The process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output).
- Analyze the impact of changes in input prices on production costs.
Verified Answer
MB
Learning Objectives
- Analyze the impact of changes in input prices on production costs.
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